This indicator is based on the contraction, expansion, and trend phases concept.
I wrote this indicator and optimized it to be user-friendly and show the best value levels in various different timeframes.
The script itself uses Average True Range , WMAs, RSI , and volatility to determine contraction zones and possible expansions.
The contraction phase is the first phase of the market. The script will automatically plot the box, which is the contraction. This is the phase that traders should avoid trading because the value line has yet to be formed. You don't know if the trade will violently go up or down since it is in the next phase.
The expansion is the next phase where high volume and volatility occur. I decided to use RSI crossovers and crossunders to help find the expansion zones since it can be pretty difficult to get a program to recognize them and also since this is the phase where accumulation by the big liquidity players, like the institutions, starts.
The trend phase isn't yet implemented into the script, but basically is when these big liquidity players start taking profits. This is the part where it tends to go back to the value line , even if it is bullish or bearish .
This concept is extremely versatile and can be used to create various different strategies, from long-term strategies to scalping strategies. You can combine this with indicators and not be lost.
To be clear, the boxes are the contraction mapped and the zones you should always avoid trading in.
On timeframes that are hourly and above, the value lines will automatically be plotted by the script.
Some Customization Features:
You can decide different line styles like dotted, solid, dashed, or arrows.
You can also customize the width of the value line but the recommended widths is either 1 or 2.
On default, the value lines retrieved by the contractions will be disabled on timeframes lower than the hourly or daily because it can become unorganized but the option to enable lower timeframe value lines have been added now.
The value lines will automatically extend until another contraction is present
Option to choose if you want filtered contractions or unfiltered contractions.
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Added color and border customization for value lines and the contraction boxes.
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Added a multiple timeframe contraction screener. With this screener you can see if the range is getting tighter on these timeframes and whether or not if you should avoid trade entries. For example, if you're an scalper and you are about to enter but then there is a contraction on the 4 hourly, seeing this alert might make you think twice of entering an trade.
You can also customize or add custom timeframes to see what's happening in those timeframes.
I got the idea for the UI design of this screener from FVG Screener (Nephew_Sam__)
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Image of the MTF Contraction Screener
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Fixed a quick theme bug update for those who used bright charts.
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Added better mitigated value lines that check for either a lower low or a higher high.
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Reverted the version since I need to fix a bug before I successfully publish the mitigated value lines.
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Added Expansion Lines. There are two expansion lines, expansion line one and expansion line two. It basically forms a broadening wedge like symbol on contractions with lowers lowers and higher highs. You can also change the color and / or disable it in the indicators settings.
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Added consolidations to the indicator. Most proper contractions happen during consolidating markets, so it acts as a confirmation and it allows you to find sweeps and raids in the charts.
I got help and ideas for the consolidation part from "LonesomeTheBlue" Consolidation script. You can also enable or disable in the settings.
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Added the option to include color coded candle bar charts which show specific market phases. If the market is in an contraction phase like usual it will be yellow. If the market is in a expansion phase, the candle color will be blue. If the market is in a bullish trend phase the candle will be green and if bearish it will be red.
You can disable the colored bar candles and also change the color and change the Trend EMA in the settings.
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Added the option to disable the MTF contraction screener with a checkbox
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New chart image
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Added more user customizations ability to the consolidations.
You are now able to change the top and bottom consolidation color.
There is now a midpoint line in between the top and bottom consolidation.
You can change the width and style of the consolidation lines.
The midpoint can be extended.
This update was supposed to be apart of a much bigger update but that update might take a while since I need to rework the logic of a huge part of the script. (Not the contraction part)
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Fixed a bug
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New Update:
Added consolidation top and bottom lines that will extend until the consolidation line was mitigated and a fill zone for the consolidation zones.
Everything to customize the consolidations for your preferences is in the menu. At the default the consolidations won't extend but you have the option to extend the consolidations until it is mitigated.
A new option in the script to prevent lag and calculation errors due to PineScript is the Line settings on the first part of the script. The default setting is the recommended value of 30. (For Max Lines to Show)
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Removed the consolidation extension and placed in another indicator since PineScript limitations didn't let me successfully optimize the extension lines and it kept displaying "memory issues", (The indicator was too big at this point)
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Some bug fixes related to the midpoints on the consolidation.
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Fixed a bug where the script didn't load.
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Improved the contraction calculations and fixed minor bugs.